Monthly Archives: May 2021

Its an if-only dream that many share, but it might never come to fruition, given the financial elements that point to only one outcome: an eventual win by Big Tech.

Consider that AT&T shares were around $38 when the company announced the deal to buy Time Warner in May of 2017. As of Thursday, the stock was around $29, and the companys market cap was $211.3 billion. Verizons stock has done a little better in that time period, going from $45 to $57 a share, and a $235.4 billion valuation.

In the same period, Netflixs share price went from $160 to $502 ($222.7 billion valuation), Amazons from $996 to $3,248 ($1.64 trillion), Apples from $38 to $127 ($2.2 trillion) and Googles from $955 to $2,303 ($1.56 trillion).

You can see where this is going,

Big Tech companies cannot make huge acquisitions of creative-content companies nowadays because of a political climate that is increasingly skeptical of their monopolistic power. But they only have to sit and wait to bleed out what are now much smaller and less powerful media companies by simply plowing more investment into content and talent.

Like all monopolies going back to oil or trains, the tech companies will just slowly starve the competition, a top media executive said to me, also noting that Mr. Stankey did not have the support or fortitude to keep going. I guess its good that he stopped banging his head against the wall, the executive said.

Or maybe not, given his problematic choice of Discovery as a partner. Its simply too small, even with a multibillion-dollar war chest to make content. Thats why I would not be surprised to see another, larger bidder for Time Warner emerge soon perhaps Comcast, which already owns NBCUniversal. While some people denounce the consolidation of media companies, there are few choices for media firms when they are facing down the tech companies.

Tech giants have more of everything. They are much more flexible with creators. They have more platforms to offer. They control all the key user data and are getting better at all kinds of media making. More important, they do not have the need to make a profit in media, since they all have other ways to make money, and they have an investor base highly tolerant of investing in growth.

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Opinion | AT&Ts Sorry Retreat From Digital Media - The New York Times

FILE PHOTO: A woman stands in front of the logo of Snap Inc on the floor of the New York Stock Exchange (NYSE) in New York City, NY, U.S. March 2, 2017. REUTERS/Lucas Jackson

(Reuters) - Snap Inc said Friday it will acquire WaveOptics Ltd, a British augmented reality (AR) technology company, for over $500 million.

The deal, first reported by The Verge and confirmed by a Snap spokesman, will help the owner of photo messaging app Snapchat push its way into a future where AR eyewear could be ubiquitous.

Snap, along with other tech giants like Facebook Inc and Apple Inc, are racing to build AR devices as the next technological frontier after the smartphone.

The vision behind AR eyewear is that it could allow a user to virtually see route directions in front of them, or see information about a landmark in their surroundings, for example.

Snap said it will pay half the $500 million for WaveOptics in stock at closing, and the other half will be paid in either cash or stock in two years. Snap is based in Santa Monica, California, while WaveOptics is headquartered in Oxford, England.

On Thursday, Snap unveiled a new version of its Spectacles glasses, the first to incorporate AR with two built-in cameras, two speakers and four microphones.

The new Spectacles wont be sold to the public, and will only be available to AR developers who apply to use the glasses.

Reporting by Sheila Dang; editing by Jonathan Oatis

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Snap to buy augmented reality company WaveOptics for over $500 mln - Reuters

May 20th 2021

SAN FRANCISCO

A COUPLE OF years ago Snap, the company behind Snapchat, a social-media app, came close to imitating the feature for which it was then famous: digital photos that self-destruct ten seconds after the recipient views them. Shortly after a headline-grabbing initial public offering in 2017, the firm faced a user revolt triggered by an unpopular redesign, falling rates after it started automatically auctioning ad space and an exodus of executives. Its shares dropped precipitously in value, at one point in late 2018 sinking below $5, less than a fifth of the price they fetched when the firm started trading.

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Snap has since staged one of the greatest turnarounds in tech history. When it reported its latest quarterly results in April, it pleasantly surprised analysts again, just as it has for the past few quarters. Revenue grew by 66% from a year earlier, to $770m. The number of daily users reached 280m, an addition of more than 50m over the same period. The firms share price has surged by 208% in the past 12 months, to $54. The pandemic exposed the resilience of the changes we have made, says Evan Spiegel, Snaps boss.

The comeback reveals a broader trend. While the largest Western tech companies have had a blowout first quarter, firms that fall in the category belowcall them tier-two techare growing briskly, too. And it is not just the extra digital demand generated by the pandemic that is making all boats rise, or the fact that it is easier for smaller firms to grow. Some second-tier companies are confounding sceptics who claimed it was impossible to thrive in the shadow of the industrys titans.

By any reasonable definition, the universe of biggish listed tech companies is large. In America it includes hundreds of firms. We have defined as tier-two those with a market value of no less than $20bn that were incorporated in 2000 or later. That leaves 42 firms worth a combined $2.4trn. They range from e-commerce sites and streaming services to travel firms and vendors of corporate applications.

Even before the pandemic this group had added some weight relative to GAFAM, as some now call Americas five tech behemoths (Google and its parent company Alphabet, Apple, Facebook, Amazon and Microsoft). In February 2020 its joint market capitalisation amounted to 22% of GAFAMs, up from 14% three years earlier (see chart).

One reason for the increase in relative size in America is technological progress, especially the rise of cloud computing. This has allowed firms to specialise and created big markets even for seemingly obscure products and services, which can now be tailored for narrow purposes and offered globally. The investments we made back in 2017 are now paying off, says Mr Spiegel.

A good example is Twilio. The firm is largely unknown to consumers, but used by most. It provides services for text, voice and video communication to more than 200,000 other firms, from Airbnb, a home-sharing site, to Zendesk, a help-desk service. After a few years of fast growth, its annual revenue is approaching $2bn and its market capitalisation exceeds $50bn. If you are a developer, you dont have to spend a year to understand all the details. You can just plug into our systems, explains Jeff Lawson, Twilios boss, thats the idea of infrastructure-as-a-service.

The pandemic has given the second tier a further boost. At its peak it was worth 35% of the big five (although that has fallen to 29%, as investors have cooled on newish tech stocks). This pattern in America of a weightier second tier has parallels in China, where a new generation of tech darlings, including Meituan and Pinduoduo, has come of age to take on the duopoly of Alibaba and Tencent. Covid has been the great digital accelerator, says Mr Lawson.

Demand for Twilios services, for instance enabling salespeople to communicate electronically with customers, shot up when physical retailers had to move online. Many other second-tier tech firms benefited, too. Zoom, a now near-ubiquitous videoconferencing service, saw its revenue surge to $882m in the latest quarter, nearly a five-fold increase on a year earlier. Revenues of Shopify, an e-commerce platform, more than doubled. Most of the other 40 firms in our sample grew by double digits or more. Besides Snap, these include Pinterest, another social-media firm (78%), and PayPal, a provider of online payments (29%).

The techlash has helped, too. Under scrutiny from critics and regulators, GAFAM mostly shied away from big takeovers (with the notable exception of Microsoft, which recently bought Nuance, which makes speech-recognition and other software, for $16bn and was rumoured to be in talks with Pinterest). This in turn has pushed more tier-two firms to go public. Of the 42, no fewer than 13 did so in 2019 and 2020, adding about $600bn to the groups current collective market capitalisation.

The second tier have succeeded mainly by getting better at creating protected space for themselves to grow, says Mark Mahaney of Evercore ISI, an investment bank. They not only offer compelling products but have built, in geek speak, platforms, complete with an ecosystem of users and corporate partners on top.

Platforms are best thought of as a marketplace, where the operator provides some basic services that enable buyers and sellers to transact. They often exhibit strong network effects: more buyers attract more merchants, which attract more buyers and so on. Such setups also make it harder for one of the giants to ape rival products, as Microsoft has done with Slack or Apple with Spotify.

Take Snap. It was straightforward for Facebook to copy Snapchats hallmark feature, called Stories. These were just collections of pictures and videos captured within the past 24 hours. So the firm has instead recast Stories as a platform on which curated partners, such as big media companies, can offer original content. Snapchats four other main offerings are conceived as platforms, too. For example, users of Map can locate their friends and local hotspots, and Camera lets tens of thousands of developers offer digital filters for users cameras.

Several more tier-two firms have also erected robust platforms. Shopify does not compete with Amazon. We are not a retailer. We are a piece of software that powers other brands, explains Harley Finkelstein, the companys president. Instead of selling stuff for other firms, in other words, the site provides them with tools to set up their own virtual stores, from web hosting to payment, and allows third-party companies to offer additional services, including design and delivery.

Similarly, the more users and merchants PayPal and other payments firms like Square and Stripe attract, the more useful they become to everyone. Twilios corporate customers and developers of more specialised communication applications, such as call-centre software and group texting, likewise feed off each other.

Others are trying to spin up their own flywheels, as the digital virtuous circles are known. Spotify and Twitter want to fulfil this function for anyone producing digital works. The first now sees itself as a home for all sorts of audio content, from songs to podcasts. The second mainly aims to distribute all manner of written content, including tweets and newsletters. Zoom, for its part, in October introduced Zapps (later renamed Zoom Apps). These, much like the lenses on Snapchat and the applications on Twilio, are supposed to form a moat that both keeps rivals at a safe distance and creates additional demand.

Not all this platform-building will succeed. But where it does, the builders could yet catch up with GAFAM, at least if tech history is a guide.

In China Meituan and Pinduoduo, two e-commerce platforms, have overtaken Baidu to become the third- and fourth-largest internet firms in China. Only a few years ago Adobe and Salesforce, two providers of corporate applications (which are both too old to be included in our sample), were still much smaller than Oracle and SAP, leaders in business software, let alone Microsoft. Adobe and Salesforce still have lower revenues than Oracle and SAP. But they are growing faster and are now in the same league in terms of market capitalisation, currently worth $229bn and $204bn, respectively, compared with $227bn for Oracle and $168bn for SAP.

S is the most likely letter to be added to the GAFAM acronym. In its new incarnation, Snap may yet become a serious rival to Facebook. Snapchat is now arguably the closest the West has to a super-app (the model is WeChat, Tencents flagship platform). If it keeps buying biggish companies, meanwhile, Salesforce could one day pull even with Microsoft. And if it continues on its current trajectory long enough, more wares may one day be sold on Shopify than on Amazon.

Much has to go right for this to happen. One risk is that the tech sell-off of the past few weeks makes it harder for loss-making firms to raise capital, or maintain the enthusiasm of shareholders for heavy losses in the pursuit of growth. Over three-fifths of the second tier lose money. The titans will have to become less innovative, the reason Oracle and SAP have seen their lead eroded. Many of the second-tier tech firms will need to be willing to merge. And trustbusters will have to tackle GAFAMs dominance. Unless the regulatory environment really changes, this is going to be the status quo for the foreseeable future, argues Dan Ives of Wedbush Securities, an investment firm.

Instead of waiting for a second-tier firm to grow into a GAFAM-sized beast, it may be more realistic to expect an ecosystem like the biological one, in which species of all sizes find their niche. Dinosaurs occasionally die out. But that happens rarely, and mostly through outside intervention.

A version of this article was published online on May 16th, 2021

This article appeared in the Business section of the print edition under the headline "In the shadow of giants"

Original post:

How to thrive in the shadow of giants - The Economist

Computex 2021, the yearly computing conference in Taiwan, is nearing its launch. In 2020, it was due to happen, but the COVID-19 pandemic resulted in its cancellation. The annual Taipei international information show will not be postponed or stopped this time since it will kick off online for all viewers.

We could expect many major keynotes that will arrive for the upcoming event, which involve the biggest chip manufacturers in the world, including Intel, AMD, and Nvidia.

We could potentially see other tech companies, such as Arm, Gigabyte, and Acer, in the virtual show.

Computex 2021 Will Push Through This Year

(Photo : Cherry blossomCherry blossom (@14ayakosan) from Twitter)AMD CEO presents a next-gen GPU.

It is already announced that Computex 2021 will begin on May 31 until June. For the first week of the event, we could look after the most important news, especially the keynotes from the tech giants, Intel, Nvidia, and AMD, which will share different topics concerning the field of computing.

According to AMD, the annual keynote announcement for Computex 2021 will be spearheaded by their CEO Lisa Su. At the moment, there is no single hint of what could be discussed in the event, but we could hope that Su will talk about their products that were already released over the past months.

Most importantly, we could hear more news about the Radeon RX 6600 XT. WCCTech reported that it will come with an 8GB GDDR6 Memory. This month, many pictures of the rumored high-spec GPU circulated online.

It's also possible that they are getting some teasers for AMD gaming laptops since it's been a long time since AMD spoke about the portable devices. Additionally, we could find the Threadripper 5000 to complete the line-up for the new-gen processors.

Read Also:Computex 2016: SanDisk Unveils Dual Flash Drive For USB Type-C Devices

Computing enthusiasts should pay close details to the keynotes during the first week. The one that Nvidia will impart will focus on the "The Transformational Power of Accelerated Computing, From Gaming to the Enterprise Data Center," which suggests that we could see more AI gaming.

While it's a sweet moment to see the leaked RTX 3070 Ti and the GeForce RTX 3080Ti, what's inside them could be more surprising than ever. Who knows if the company will release another new GPU under Team Green?

On top of that, expect more talk about ray tracing, DLSS, and Gy-Sync displays. The evolving trend of gaming is a runway for these features, which will be showcased soon upon the major Nvidia RTX tech launch.

Techradar reported that Intel has been on a hot start ahead of Computex 2021. For Intel fans, don't forget to breathe for more announcements about Tiger Lake-H and Rocket Lake-S.

Just like AMD and Nvidia, Intel could be the darkhorse of this year's computing event. Rumors about Intel Xe DG2 pooled the processor forums all over Reddit and the other platforms, so we could likely have a shot to see it.

Related Article: Computex 2017: AMD Ryzen Desktop PC From Acer, Asus, Dell, HP, And Lenovo Unwrapped

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Written by Joseph Henry

2021 TECHTIMES.com All rights reserved. Do not reproduce without permission.

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Computex 2021 to Officially Start on May 31: AMD, Nvidia, and Intel Keynotes to be Expected - Tech Times